10. 16 minutes of SMM internal aluminum morning meeting
Disk: Shanghai aluminum month contract exchange month to 1911 contract. Overnight, the 1912 contract of Shanghai Aluminum Company opened low at 13760 yuan / ton, closing at 13790 yuan / ton, up 40 yuan / ton, or 0.29%, from the opening of the day, mainly by long positions. Yesterday, Lun aluminum opened at $1719.5 / ton, and fell back higher in the Asian session. European performance bottomed out and closed at $1729.5 / ton, mainly short positions.
Macro: (1) China's social financing scale increased by 2.27 trillion yuan in September, expected to be 1.885 trillion yuan, compared with the previous value of 1.98 trillion yuan; in September, China's PPI fell 1.2 percent from the same period last year, up 0.1 percent; in September, CPI rose 3 percent from the same period last year; (2) IMF lowered its forecast for GDP growth in the United States from 2.6 percent to 2.4 percent in 2019; (3) it is rumored that the EU and the UK are close to reaching a Brexit agreement, with European stock and bond yields collectively rising, while the European STOXX 600 index has expanded and is now up more than 1 per cent.
Fundamentals: in bauxite, Metro Minerals has completed the second phase expansion feasibility study of bauxite, with an annual output of 6 million wet tons, 109.5 million tons of bauxite reserves and 2037 years of age; electrolytic aluminum, Bahrain Aluminium Company (aluminum Bahrain B.S.C.) It was announced a few days ago that the company's primary aluminum production and sales reached a record in the third quarter of this year, with raw aluminum production reaching 385396 tons, up 53 percent from the same period last year. Original aluminum sales reached 376025 tons, also rose sharply from the same period last year, up 51%; downstream, SMM completed its September start-up rate survey, aluminum profiles, strip foil, original recycled alloy operating rate month-on-month warming, but profile, aluminum foil and primary alloy operating rate fell year-on-year.
Spot: yesterday morning in Shanghai Wuxi market spot transaction prices are mostly concentrated in 13780-13790 yuan / ton, the surface rising water around 20-30 yuan / ton, the price is basically the same as the previous day, Hangzhou price in 13800-13820 yuan / ton, as aluminum first suppressed and then rose, Shanghai, tin spot prices began to concentrate in 13790-13810 yuan / ton. Downstream manufacturers mainly go on demand, some downstream have the willingness to purchase, but due to the reduction of shipments in the later stage of the shippers, the actual transactions between the two sides are not much. This morning, the East China spot market warmed up, the market received active transactions, spot rose 40 to 50 yuan / ton.
Summary: the contradiction between long and short in the short-term market still exists, although the supply increase is expected, but the actual growth rate is slow. With the recovery after the consumption holiday, the spot social inventory continues to go to the warehouse. At the present stage, the consumption can still go to the warehouse to continue to make the industry still need to give electrolytic aluminum a certain profit space, should not be too bearish, we should pay attention to the sustainability of consumption. Due to the increase in overseas alumina supply and weak demand, the internal and external positive sleeve will drag down the increased risk and can appropriately reduce the position. The monthly difference between SHFE contracts maintains a pattern of near strength and far weakness, which can be properly intervened.
(SMM Li Hao)